March 2010 - The California Public Utilities Commission (CPUC) approved the use of unbundled tradable renewable energy credits (TRECs) to meet the state's renewable portfolio standard (RPS). The CPUC determined that the use of TRECs for RPS compliance will provide more options and flexibility for RPS-obligated electricity sellers to comply with RPS mandates in both the near and longer term. Previously, compliance with the RPS had to be met exclusively with energy bundled with RECs. California's RPS requires investor-owned utilities, energy service providers, and community choice aggregators operating in California to obtain 20 percent of their retail sales from renewable energy sources by 2010. In September 2009, California Governor Schwarzenegger signed an Executive Order increasing and extending the RPS to 33% by 2020.

The CPUC decision initially limits the use of TRECs to no more than 25 percent of each utility's annual renewable energy obligation. A price ceiling was also set at $50 per TREC, or $50/MWh. Both the usage cap and the price ceiling sunset at the end of 2011 unless the CPUC takes action to retain or modify the provisions. In order to use RECs, participants must meet the requirements set forth by the CPUC for REC trading, as well the requirements of the Western Renewable Generation Information System (WREGIS), the system through which all California RPS-eligible RECs must be tracked. TRECs may be traded for up to three years from their date of creation before they must be committed to use for RPS compliance.